LIMESTONE, Maine — Control of the 200-mile-long pipeline that once linked jet fuel tanks in Searsport with the former Loring Air Force Base will be auctioned off next month.
The company that had been leasing the right of way, pipeline and associated equipment, Loring BioEnergy, has defaulted on its lease payments, a lawyer for the mortgage holder said.
The pipeline was built by the Department of Defense in the early 1950s at the height of the Cold War to supply jet aircraft with fuel. The jet fuel was taken by ship to the port facility at Mack Point in Searsport, then pumped through the 6-inch diameter pipe north to the base.
Loring BioEnergy, through a complex set of leases and fee interest arrangements, had control of the pipeline, said Jacob Manheimer, an attorney with Pierce Atwood in Portland, representing the current mortgage holder, United States Power Fund LP. The nonprofit Loring Development Authority owns the corridor real estate.
Loring BioEnergy wants to build a co-generation power facility, producing electricity and steam or heat that could be used by a food or wood processor. The company planned to have its power plant, to be located at the former base, supplied by natural gas pumped through the pipeline.
Since more electricity would be produced than can be used in Aroostook County, the business plan also called for sending electricity on lines south to connect to the New England power grid. Aroostook County is not directly linked by electric lines to the central and southern parts of Maine but is connected through New Brunswick.
The New England power pool group declined to build an electric line at ratepayer expense linking The County with the rest of the region. As a fallback, Loring BioEnergy is considering constructing its own, smaller electric line to be buried along the 200-mile pipeline corridor and then underwater to Boston, according to Hayes Gahagan, company vice president.
With the ratepayer electric line failing to gain approval, Gahagan said Loring BioEnergy’s proposal has stalled and it has fallen behind in lease payments on the pipeline.
The 90-plus-year lease for the pipeline, Gahagan said Wednesday, was collateral for a loan from United States Power Fund. Neither Manheimer nor Gahagan would say what the value of the lease was or how much was owed.
United States Power Fund is holding the June 4 auction at the Robert A. Frost Memorial Library in Limestone. The auction requires bidders to deposit $450,000 to participate. The actual value of the combined assets — access to the corridor and the pipe, pumps and valves — is believed to be more than $5 million, according to Manheimer.
A successful bidder, Manheimer said, would own “all of the rights of Loring BioEnergy to develop and operate the pipeline,” including the rights of way over the 50-foot-wide corridor that extends from Searsport to Limestone. A new owner would be able to use the pipeline, but not do much more, he suggested.
The pipeline was decommissioned in 1994 and filled with nitrogen to inhibit corrosion.
Established corridors such as this one are considered valuable because the cost of developing new ones is so prohibitive. Whether for a road or a power line, securing rights of way over private property would have to come through negotiations with countless owners or through eminent domain seizures that could be challenged, dragging out the process.
Corridors such as the one that holds the Searsport to Limestone pipeline could be used for electric transmission lines, natural gas pipes, data lines or even a railroad.
Gahagan downplayed the meaning of the foreclosure and said it is not a death knell for his company’s proposed energy project. He believes his company could reach a deal with whatever business entity ends up owning the rights to the pipeline and corridor and lease it for natural gas transmission.
After the Maine Power Connection proposal was shot down by ISO New England, the regional electric grid, Gahagan said Loring BioEnergy reconfigured its plans. The company is going through a reorganization, he said Wednesday.
By state law, the foreclosure proceeding requires a public auction. United States Power Fund could itself be a bidder at the auction, Manheimer said.
I hope Quimby doesn’t go to the auction , or it’ll be more of Maine shut off to the public…LOL
I’d like to see a larger map that shows exactly where this pipeline is. Never heard of it!
It would make one heck of a snowmobile trail.
an a atv trail too
It parallels US HWY 2 in some places and can be viewed in Mattawamkeag and other places.
Now’s the time for LePage to swoop in. The State buying this will at least get the natural gas to Mattawamkeag – then just a promised hop skip and a jump to those Millinocket paper mills.
Bet the Canadians buy it like everything else in Maine. We might as well apply to be a Province. At least we will finally get free health care.
I’m predicting Irving will buy it.
Nothings free
I too had never heard of this pipeline.
It seems like an easy way to get natural gas pretty far north and as such I’d imagine there will be a fair amount of interested parties at the auction.
Runs parallel with 2 through Haynesville woods, 116 in Chester. Crosses Coldbrook road in Hamden not far from the intersection.
It passes through Monticello right beside the old swimming hole known as Russel Rock. Would this not have been initially built using our taxpayer dollars? How did it end up privately owned and being auctioned off for millions. Why do we in Northern Maine pay some of the highest fuel costs ?? Because we allow something like this to happen and this thing has been sitting idle. I would like to see a news report of the history of ownership of this pipe line.
Hayes Gahagan, is the chairman of the Aroostook County Republicans. Connect the dots and follow the money to see how he ended up with the line.
Yes, the ACRC is a shell organization, ties to the Russian mob too, and don’t forget that Haliburton is where Hayes Gahagan got his start.
Feel free to keep it, you can pay the cleanup costs on this dilapidated old deer trail. Oh, wait, it’s so grown in the deer can’t use it!
@David Ricker: After Loring was closed by the short-sighted BRAC Commission, the pipeline was “excessed.” If government no longer has the need for something, they auction it off, usually for a fraction of the construction and/or purchase price, but it is better than leaving something to rot. I do not know how the government makes use of the proceeds from these auctions. They could divert the funds to anything from healthcare to the infamous $10,000 toilet seats.
Actually there are accounts for property that is sold and the returns are used to fund future projects and or to maintain current properties. If you look in the DOD regulations you can actually follow the money. this link will give you a start in that direction:
http://comptroller.defense.gov/fmr/12/12_13.pdf
Perhaps you missed it but Loring AFB closed in 1994. It and its assets were then transferred to the private, non-profit Loring Development Authority. Same thing happened at Pease AFB and BNAS. Surely you understand that the Government can transfer property that it once used and owned to a private entity when it is done with it.
yeah, we understand.. doesn’t make it right. If the government originally took the land for the public good, and it finishes with it, it should give it back or offer it for sale to the abutters at the ORIGINAL amount that was paid for it. Why should the government or its cronies benefit from land speculation?
The Loring Development Authority owns the pipeline. Gahagan borrowed money to pay the LDA for a lease on the line. Gahagan now cannot pay the Bank for the loan.
The auction is required by law, whoever is the high bidder will only get the lease rights, the LDA will still own the pipeline.
So, Hayes Gahagan has come out of the woodwork and into the headlines again? For those with short memories or who are simply uninformed, like the BDN writer of this article, let me inform you.
Hayes ran for governor many years ago with a catchy campaign song sung to the tune of “The monkey around the flag pole.” His campaign collapsed when he started accusing his oppents of doctoring his campaign photos with subliminal images. It also didn’t help when it was revealed that he was connected with a group called “the Way International”. After that failed campaign he disappeared until recently.
Like all young people in quest for a greater meaning in life, I’m sure Hayes was no different. Anyway, I doubt he is still associated with The Way International. So far what I am hearing from posters here are mere negative impressions. I’ve met him before in person and was left with a very positive image of him. I think Hayes is sincere and is trying to create jobs in the Loring area for people he genuinely cares about. And if he happens to make money in this venture, who cares? Why put down a relatively small investor – assuming he is one – who can probably help lift up his community from its longstanding economic doldrums? Please don’t bite the hand that might turn out to feed you.
NASTY lib! He’s actually been quite public and doing much for Maine for the last twenty years.
The use of this existing pipeline to lower energy costs in Northern Maine will never happen, it does not fit in with current Government policies to exterminate all use of fossil fuels. True benefits no longer matter in the politicaly corrupt” green energy” agenda now adhered to.
You forgot there’s a new sheriff in town (Augusta).
I believe Irving took a look at using the pipeline a number of years ago and extending it into Canada. Guess nothing came of it. Even after Loring AFB closed the pipeline continued for a few years to supply fuel to the Maineacs at the Bangor ANG. The USAF fuels lab in Searsport finally closed in 2004 and by then fuel for Bangor was being trucked from Brunswick NAS.
Perfect, just pipe it to the new LP gas tank in Seasport and you have an instant distribution system!
Hi Hopperdredgebill,
My first thought exactly as the terminus is at Mack Point and the LPG fracking in New Brunswick is a possible ongoing market but geography for that isn’t perfect ( the fracking is near Fredricton) and I’m not sure they are using enough LPG to make that worthwihile..also not sure thereis a large enough LPG market in northern Maine to make this feasible.
World markets see LPG is a short term fuel..everyone globally is phasing away from all petroleum based fuels and a lot of the LPG pipeline infrastructure is being closed or reallocated to natural gas.
There is already a major and very new natural gas pipeline in northern Mainne so don’t need another one.
Not sure how wide the right of way is but I saw rail..on that line..connecting Houlton, paper mills, LPG suppliers and manufacturers& businesses at Loring with the port at Searsport..would be so great. Could still also be used as a utility corridor.
A rail use of that corridor Would help so many northern Maine communities and their existing job centers and also create more non petroleum, non chemical related uses for the Searsport Port and more non hazardous products jobs at Searsport.
There might even be federal money.Rail projects are eliigible under Maine’s secretive Transportation Privatization statute ( Title 23 Section 4251, April 2010).
Makes a lot more sense and would do so much more for Maine than that foolish East West Highway David Cole, Peter Vigue and MDOT Ted Talbot are schlepping around as Maine’s salvation..
Crosses the Argyle rd. in a couple places runs up the river side to Howland .there is a pumping station in Argyle to boost it ,way back in the day the word was that some locals used to ahem ,borrow the product to heat there “traila” burned real good in the miller gun furnace :)
In the very early 90s I rented a little house in Argyle, and that pipeline ran right through my backyard. It was a wonderful trail going along the river for miles. One summer day a crew came through with weedwhackers and chainsaws, doing maintenance. They spared a bush where I said a bird was nesting — but didn’t tell me another crew would be coming through in a few days to do cleanup of details, including shrubs spared at homeowners’ requests. In 2007 I stopped by my old house to see if I could get on the trail — the house, which used to be tiny, was now huge and unrecognizable, and there was no sign of the trail (even if I could have blithely walked through these people’s yard — I did go into the woods further down, but the trail dead-ended at the boundary of my old yard).
I suppose they might end up with some roots growing deep enough to damage the pipeline. I hope it’s buried deep enough to survive until it finally gets used again.
Wouldn’t this be an ideal opportunity to bring natural gas to the county? This might even improve on the economic base if there was an alternative source of energy that is easier on the pocket book.